By Debra Wood, RN, contributor
July 8, 2010 - Although the economy shows signs of recovery, hospitals continue feeling the recession’s effects, as patients delay or forgo care and poorer reimbursement rates place financial strains on facilities, according to a recent report from the American Hospital Association.
Val Gokenbach, RN, DM, said further cuts in hospital funding would likely lead to further staffing cuts, which could have devastating effects on the health care industry.
“I believe that the effects of this recession have the potential to be devastating for the health care industry, resulting in a degradation of quality during a time when quality and service should be our highest priority,” said Val Gokenbach, RN, DM, vice president and chief nurse executive for Beaumont Hospital in Royal Oak, Mich.
The AHA survey of 572 nonfederal, acute-care hospitals from March and April 2010 found that, due to the recent economic downturn: nearly three-quarters of hospitals had reduced operating margins; 87 percent had increases in bad debt and charity care; 65 percent had more patients covered by Medicaid, CHIP and other low-reimbursement programs; 76 percent have cut administrative costs; and 53 percent had reduced staff.
“Continued reduction in funding to hospitals will certainly force reductions in manpower,” Gokenbach said.
Beaumont Hospitals has worked hard to retain nurses, looking to other places to cut.
“Nurses provide bedside care and are difficult and costly to recruit. Laying off nurses can affect quality of care,” said Nick Vitale, senior vice president of financial operations for Beaumont Hospitals. “In times of recession when we have to reduce positions, we focus on cutting support functions such as administration, finance, billing, human resources, medical records, material management, etc. We are often able to absorb these cuts by improving productivity in these areas.”
Gokenbach cautioned, “Even if the intent is to retain nurses at the bedside, elimination of support staff will result in nurses needing to perform tasks that will further remove them from their patients. Over the years, most hospitals have been focusing on becoming leaner, and in many organizations there is not much left but bedside caregivers.”
Lydia Galeon reported that Metropolitan Jewish Health System has added benefits, even during the recession, to help retain its nursing workforce.
Metropolitan Jewish Health System in Brooklyn, N.Y., also has spared nurses from cuts, preferring to optimize operations, said Lydia Galeon, vice president of long-term care and business initiatives.
For instance, it has increased the case load of its chronic care managers, and in its home care division, Metropolitan Jewish increased the number of cases a nurse manages and the visits a nurse is expected to make per day. It also switched to geographic placement of the cases to decrease travel time.
“It’s important to keep nurses for a lot of reasons,” Galeon said. She has found nurses are delaying retirement, working more hours and deferring having more children due to the recession. In some cases their spouses have been laid off, making them the family’s only income earner.
“Health care is growing, so we cannot lay off,” Galeon added. In addition, hospitals are concerned with readmissions and that requires greater collaboration and communication between settings. Cutting nursing personnel could backfire and cost hospitals money.
Even so, some facilities, such as Grady Memorial Hospital in Atlanta, have cut back on nursing personnel, and other facilities, including St. Vincent’s in New York, have closed.
Connie Curran, EdD, RN, FAAN, said nursing jobs will remain vulnerable during recessions until more RNs sit on hospital boards and have a say in operations and budgets.
“Nurses have been laid off all over,” said Connie Curran, EdD, RN, FAAN, president of CurranAssociates, a health-care consulting firm in Chicago. “As the largest group of employees, they are the first to go.”
Curran added that as patient volume drops, fewer nurses are needed.
The AHA survey found that 70 percent of hospitals reported depressed patient volumes, and 72 percent of hospitals indicated they were performing fewer elective procedures.
Galeon said that patients are exhibiting more caution about coming to the hospital for care, spending money for prescriptions and seeking care from their physicians, because copayments add up. But by delaying care, they are often sicker and need more services when they finally present to a provider.
Hospital boards determine how facilities will cope with declining revenue, and few of the boards include nurses, Curran added. She said until nurses participate in the meetings and are able to explain nursing’s contribution to the organization, nurses will face layoff risks.
“If the board doesn’t really understand what nurses do, it’s very unlikely it will modify the budget in a way that’s user-friendly to nurses, and I would say user-friendly to patients,” Curran said. “It may look like an easy way to cut expenses, but you may end up paying twice as much if you have a bad quality problem because of it.”
As payors begin to reimburse hospitals based on performance and quality metrics, any cuts to nurse staffing could come back to haunt facilities.
“Beaumont recognizes that it cannot cut its way to prosperity and is also focused on increasing revenue by making improvements in the revenue cycle and in growing profitable areas of our business,” Vitale said. “Because we cannot control the market, our management team stays focused on operations and what we can do to operate more efficiently, lower our expenses and generate more revenue for the organization.”
Metropolitan Jewish is preparing for the future.
“Our health system is forward thinking,” Galeon said. “The leadership here thinks that when there is a reversal [of the recession], we will be ready for it.”
© 2010. AMN Healthcare, Inc. All Rights Reserved.